Arturo de Guzman v. National Labor Relations Commission

Summary

This case involves employees of Affiliated Machineries Agency Ltd. (AMAL) who were dismissed when the Hong Kong-based company closed its Manila office. General manager Arturo de Guzman appropriated company assets to satisfy his own claims against AMAL, depriving other employees of their rightful share. The Supreme Court distinguished between solidary liability as an employer (which requires being a stockholder/officer) and direct liability for bad faith conduct. While De Guzman could not be held solidarily liable for AMAL's employment obligations as he was merely a managerial employee, he was directly liable for moral and exemplary damages under Civil Code Articles 19 and 21 for his abuse of rights in appropriating company assets exclusively for himself despite knowing other employees had valid claims. The Court applied the principle that rights must be exercised with justice, good faith and honesty, and ordered damages plus return of appropriated assets.